Friday, September 14 16:16:44
Spain, deflecting pressure to spell out whether it needs more European financial support, told euro zone finance ministers today it will set clear deadlines for structural economic reforms by the end of the month.
Madrid's borrowing costs have fallen sharply since the European Central Bank said it was ready to buy Spanish bonds but big borrowing needs before the year-end and a deepening recession mean most analysts and policymakers believe it only a matter of time before it will require help.
"We will adopt a new set of reforms to boost growth... It will be in line with the recommendations of the European Commission," Economy Minister Luis de Guindos told journalists after meeting his peers in Cyprus. A detailed timeline would be attached.
However in Madrid, Deputy Prime Minister Soraya Saenz de Santamaria said the cabinet would simply issue a new calendar on Sept. 28 for enacting reforms announced in July. Her comment appeared to undercut De Guindos' pledge in another example of communications problems that have dogged Spain's government.
The timing suggests a request for aid may not be far away, although de Guindos insisted the package was unrelated to any possible bailout terms. Several euro zone officials have speculated Spain could apply in time for the next meeting of euro zone finance ministers on Oct. 8.
Madrid has so far resisted austerity conditions that go beyond the EU policy recommendations it is already implementing, while north European creditors led by Germany are adamant that any aid would come on tougher terms.
The ECB has said a request for help from the euro zone's bailout fund, and the negotiation of strict, time-bound policy conditions and monitoring, is essential to trigger its bond-buying intervention in the secondary market. (C ) Reuters